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Rothbard on Greenspan

Tuesday, June 23, 2009 at 03:48 PM EDT

I first read this bit in a critique by Walter Block of various critiques of the gold standard. Rothbard wrote this in ‘87-

Greenspan’s real qualification is that he can be trusted never to rock the establishment’s boat. He has long positioned himself in the very middle of the economic spectrum. He is, like most other long-time Republican economists, a conservative Keynesian, which in these days is almost indistinguishable from the liberal Keynesians in the Democratic camp. In fact, his views are virtually the same as Paul Volcker, also a conservative Keynesian. Which means that he wants moderate deficits and tax increases, and will loudly worry about inflation as he pours on increases in the money supply.

There is one thing, however, that makes Greenspan unique, and that sets him off from his Establishment buddies. And that is that he is a follower of Ayn Rand, and therefore “philosophically” believes in laissez-faire and even the gold standard. But as the New York Times and other important media hastened to assure us, Alan only believes in laissez-faire “on the high philosophical level.” In practice, in the policies he advocates, he is a centrist like everyone else because he is a “pragmatist.”

As an alleged “laissez-faire pragmatist,” at no time in his prominent twenty-year career in politics has he ever advocated anything that even remotely smacks of laissez-faire, or even any approach toward it. For Greenspan, laissez-faire is not a lodestar, a standard, and a guide by which to set one’s course; instead, it is simply a curiosity kept in the closet, totally divorced from his concrete policy conclusions.

Thus, Greenspan is only in favor of the gold standard if all conditions are right: if the budget is balanced, trade is free, inflation is licked, everyone has the right philosophy, etc. In the same way, he might say he only favors free trade if all conditions are right: if the budget is balanced, unions are weak, we have a gold standard, the right philosophy, etc. In short, never are one’s “high philosophical principles” applied to one’s actions. It becomes almost piquant for the Establishment to have this man in its camp.


There are so many people who call themselves free marketeers, or liberals, or libertarians that one has to always be careful about “alliances of convenience” – consistency matters, and most people I know and read – myself included – are very inconsistent. I guess looseness of thought and playing around with concepts and definitions has something to do with it (this is something that, I hope, can be “repaired”), but there always exists the possibility that the “basic values” in common are so non-basic that sharing them is of no great consequence.

Just like Rothbard’s reaction to Greenspan, Mises too reacted at the first meeting of the Mont Pelerin Society in Switzerland in ‘47. Milton Friedman recollects-

Although all the participants shared the same basic values, they were by no means agreed on how to counter the attack on those values, or on the policies required to implement them. As a result, our sessions were marked by vigorous controversy over such issues as the role of religion and moral values in making possible and preserving a free society; the role of trade unions, and the appropriateness of government action to affect the distribution of income. I particularly recall a discussion of this issue, in the middle of which Ludwig von Mises stood up, announced to the assembly “You’re all a bunch of socialists,” and stomped out of the room, an assembly that contained not a single person who, by even the loosest standards, could be called a socialist.